Economy, jobless claims both grow

By Alex Kowalski

Bloomberg News

December 21, 2012 - 2:00 AM

WASHINGTON — The number of Americans filing first-time claims for unemployment insurance payments rose for the first time in five weeks, a sign further improvement in the labor market depends on faster economic growth.

The figures signal the expansion probably needs to proceed more quickly to encourage companies to hold the line on head counts and step up hiring while Congress debates the nation's budget and tax rates.

A Labor Department official Thursday said there was "nothing unusual" that affected today's figures.

Another report from the Commerce Department showed the economy expanded at a revised 3.1 percent annual rate in the third quarter after a previously reported 2.7 percent. The revision reflected more consumer spending and a smaller trade deficit.

The four-week moving average of claims, a less-volatile measure, declined to 367,750, the lowest since the end of October, from 381,500.

The number of people continuing to collect jobless benefits rose by 12,000 to 3.23 million in the week ended Dec. 8. The continuing claims figure does not include the number of workers receiving extended benefits under federal programs.

Those who've used up their traditional benefits and are now collecting emergency and extended payments decreased by about 94,000 to 2.14 million in the week ended Dec. 1. Forty-two states and territories reported a decrease in claims, while 10 reported an increase.

Employers took on 146,000 workers in November, above a median forecast that called for 85,000, according to Labor Department figures released Dec. 7. The unemployment rate fell to 7.7 percent, the lowest since December 2008.

A faster rate of hiring will likely depend on how lawmakers in Washington resolve the so-called fiscal cliff of more than $600 billion in tax increases and budget cuts set to start in January. Tightening in fiscal policy is a "major risk factor" already harming investment and hiring decisions by causing "uncertainty" or "pessimism," Fed Chairman Ben S. Bernanke said at a Dec. 12 news conference.